Liquidity for Your Hotel

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The federal and provincial governments are working on financial programs to help businesses manage at this time. Information that is being released is preliminary and we are awaiting more details, including how hotels can access these programs. The AHLA encourages you to talk to your lender(s) about how COVID-19 is impacting your business, and keep them informed about your financial situation.

We will update this list as more information comes available. This information is intended for informational purposes only. Businesses should consult their accountant, financial advisor, or government authorities before applying or making decisions about how they should use this information.

David Lund, the Hotel Financial Coach, has some tips about how hotels can manage during a financial crisis.

Federal Resources

Small & Medium-Sized Enterprise (SME) Loan & Guarantee Program

• $40 billion (combined program cap) in additional support and access to credit through your financial institution
• Loans of up to $6.25 million will be made available directly through businesses’ financial institutions and guaranteed by EDC
• Incremental credit of $6.25 million co-lent via financial institutions and BDC

Canada Emergency Business Account (CEBA)

• Implemented by eligible financial institutions in cooperation with Export Development Canada (EDC)
• $55 billion program will provide interest-free loans of up to $40,000 to small businesses and not-for-profits, to help cover their operating costs during a period where their revenues have been temporarily reduced, as a result of to the economic impacts of the COVID-19 virus
• Small businesses and not-for-profits should contact their financial institution to apply
• To qualify, these organizations will need to demonstrate they paid between $20,000 to $1.5 million in total payroll in 2019
• Applicants with $20,000 CAD or less in total employment income paid in the 2019 calendar year must:
  • Have a Canada Revenue Agency business number and have filed a 2018 or 2019 tax return.
  • Have eligible non-deferrable expenses between $40,000 and $1,500,000 CAD. Eligible non-deferrable expenses could include costs such as rent, property taxes, utilities, and insurance. Expenses are subject to verification and audit by the Government of Canada.
• Repaying the balance of the loan on or before December 31, 2022 will result in loan forgiveness of 25% (up to $10,000)
• CEBA applications are now open and businesses can apply directly through their financial institutions

Regional Relief Recovery Fund (RRRF)

• Update October 2020: The government has also announced that they will increase the RRRF by $600 million to support workers and businesses.
• The Government of Canada has announced more than $962 million in funding for the Regional Relief Recovery Fund (RRRF) to mitigate the financial pressure faced by businesses, including hoteliers. $304 million of this is earmarked for western Canada.
• May provide some relief to hoteliers who have had difficulty in accessing existing liquidity options.
• RRRF funding in Alberta, British Columbia, Manitoba, and Saskatchewan will be provided by Western Economic Diversification Canada (WD).
  • Funding requests of up to $40,000 with up to $10,000 forgivable if 75% of the loan is repaid by December 31, 2022.
  • Funding requests of up to $1,000,000 to businesses that can demonstrate a meaningful contribution to the western Canadian economy and are experiencing liquidity issues.
• Businesses that have received support from other Government of Canada relief funding measures but require additional funding to mitigate liquidity pressures may still apply.
• Businesses with sole proprietorship are not eligible for this funding.

Deferral of GST payments

• Extend GST payment remittances until June 30, 2020 for:
  • Monthly filers remitting amounts collected for the February, March, and April 2020 reporting periods,
  • Quarterly filers remitting amounts collected for the January 1, 2020 through March 31, 2020 reporting period, and
  • Annual filers, whose GST return or instalment is due in March, April, or May 2020, who must remit amounts collected and owing for their previous fiscal year and instalments of GST in respect of the filer’s current fiscal year
• Businesses in need of information about their particular obligations may contact the Canada Revenue Agency

Deferred Filing of Federal Taxes & Collection of Tax Balances

• Extends the federal tax filing deadline to June 1, 2020
• Canada Revenue Agency (CRA) will allow all taxpayers to defer until September 1, 2020, the payment of any income tax amounts that become owing on or after March 18, 2020. This relief would apply to tax balances due, as well as instalments, under Part I of the Income Tax Act
• No interest or late payment penalties
• Exception: Any taxpayers with taxes already due (for example, three months after a November 30 year-end) will not qualify for a deferral. Instalments that should have been paid up until today are also not covered by the deferral relief
• CRA will not contact SMEs (small- and medium-sized enterprises) to initiate post assessment GST/HST or income tax audits for the next 4 weeks

Canada Small Business Financing Program

• Makes it easier for small businesses to get loans from financial institutions by sharing the risk with lenders
• Small businesses or start-ups operating for profit in Canada, with gross annual revenues of $10 million or less, are eligible
• Up to a maximum of $1,000,000 for any one borrower, of which no more than $350,000 can be used for purchasing leasehold improvements or improving leased property and purchasing or improving new or used equipment

The communication provided is intended to be for informational purposes only and we strongly encourage businesses and individuals to consult a tax advisor to ensure their situation is assessed appropriately.

Provincial Resources

Small and Medium Enterprise (SME) Relaunch Grant

*Update August 20: The AHLA has been advised to encourage hotels to apply for the SME Relaunch Grant, as there are still funds left. The deadline to apply has been extended to September 30.  We encourage eligible hotels to apply soon to benefit from the funds that are still available.

• Offers financial assistance to Alberta businesses, cooperatives, and non-profit organizations that were ordered to close or curtail operations, and that experienced a revenue reduction of at least 50 per cent in April and/or May 2020, as a result of the COVID-19 pandemic.
• Eligible organizations can apply for 15% of their pre-COVID-19 revenue, up to a maximum of $5,000 in funding.
• Organizations can use these funds as they see fit to help offset a portion of their relaunch costs, such as implementing measures to minimize the risk of virus transmission, which could include:
  • physical barriers
  • purchasing personal protective equipment and disinfecting supplies
  • paying rent and employee wages
  • replacing inventory
• The Government of Alberta has committed up to $200 million in funding for the program.
• Refer to the “Revenue Calculations and Assessment” section of the Small and Medium Enterprise Relaunch Grant program guidelines for more information on how grant amounts are calculated.
• If you plan to apply for these funds, the Public Health Orders most likely to have impacted your property are:
  • Public Health Order 02-2020, which
    • Prohibited mass gatherings of more than 50 attendees.
    • Closed public recreational facilities and private entertainment facilities, including but not limited to gyms and swimming pools.
    • Closed bars and nightclubs.
    • Reduced the capacity of restaurants and food service facilities (such as breakfast rooms) to 50% capacity up to a maximum of 50 people.
  • Public Health Order 07-2020, which
    • Restricted gatherings of more than 15 people in an indoor location.
    • Restricted restaurants and other food-serving facilities, including breakfast rooms, from offering dine-in services.
• Hotels have already been applying and receiving this grant.  We encourage AHLA members to apply soon, while funds are available.

Deferral & Abatement of Tourism Levy Payments for Hotels

• Hotels and other lodging providers are allowed to keep the tourism levy they collect between March 1 and December 31, 2020. This measure will free up between $16 and $27 million in additional cash flow for the hospitality sector and will help position the accommodation industry for recovery.
• Accommodation providers are still expected to file returns throughout 2020, as required by legislation, and will be expected to resume regular tourism levy payments in 2021.
• Amounts collected prior to March 1, 2020 that are being deferred under the previously announced deferral program can continue to be deferred until August 31, 2020.

Deferred Filing of Provincial Taxes & Collection of Tax Balances

• Extends the provincial tax filing deadline to June 1, 2020 for all Alberta Corporate Income Tax Returns due after March 18, 2020 and before June 1, 2020
• Alberta Treasury Board & Finance will allow all taxpayers to defer until August 31, 2020, the payment of any income tax amounts that become owing on or after March 18, 2020, or instalments coming due between March 18, 2020 and August 31, 2020
• Alberta will waive penalties and interest that would otherwise be payable in respect of these payments
• Exception: Any taxpayers with taxes already due (for example, three months after a November 30 year-end) will not qualify for a deferral. Instalments that should have been paid up until today are also not covered by the deferral relief

The communication provided is intended to be for informational purposes only and we strongly encourage businesses and individuals to consult a tax advisor to ensure their situation is assessed appropriately.

Deferral of Workers’ Compensation Board (WCB) Premium Payments

• WBC has deferred 2020 WCB premium payments for all private sector employers until 2021
• When invoicing resumes in 2021, small- and medium-sized employers (those with $10 million or less in insurable earnings) will only be required to pay 50% of their 2020 premiums. The other 50% will be paid by the Government of Alberta.
• By deferring premium payments, all private sector employers will benefit from having increased financial liquidity; roughly $350 million in premiums will be waived to support 183,000 small- and medium-sized employers during these difficult economic times

Utility Payment Deferral

• Residential, farm, & small commercial customers can defer bill payments for the next 90 days to ensure no one will be cut off from these services during this time
• Covers electricity and natural gas, regardless of the service provider
• Program only applies to commercial customers who consume less than 2,500 gigajoules or 250,000 kWh per year & who are having difficulty paying their bills because they have been laid off through actions taken by the government to manage the COVID-19 situation
• This is not a holiday or relief but a deferral program; this means that those Albertans that qualify will have to pay the deferred amount at some point in the future
• To see if your property qualifies, please contact our Manager of Membership & Operations, Michael Presniak, at 780.423.9239.

Banking Resources

Business Credit Availability Program

Provides more than $10 billion of additional support to businesses experiencing cash flow challenges through Export Development Canada (EDC) and the Business Development Bank of Canada (BDC):

• BDC Small Business Loan
  • Maximum $100K in financing
  • Business must:
    • have been operational for the last 24 months
    • have good credit
    • be a Canadian company
    • applicant must meet provincial age of majority
  • The program does not make funds available to businesses which operate an onsite bar or lounge, however, restaurants would be acceptable
  • Inquire with your banking institution to apply

• Working Capital Term Loan
  • Up to $2M with flexible terms and payment postponements for up to 6 months for qualifying businesses
  • Postponement of payments for up to 6 months, free of charge, for existing BDC clients with total BDC loan commitment of $1M or less
  • Reduced rates on new eligible loans

Mortgage Deferrals

• Six largest banking institutions in Canada have made a commitment to work with personal & business banking customers on a case-by-case basis to provide flexible solutions to help them manage
• Currently includes a maximum 6-month payment deferral for mortgages & opportunity for relief on other credit products
• Done on a first come, first served basis and requires a direct call to your bank- the Government has a strong commitment from banks that they will be flexible
• We encourage you to talk to your lender to make arrangements, and keep them informed about your financial situation:

Additional Support for ATB Customers

• Small business customers, in addition to payment deferrals on loans and lines of credit, will be provided access to additional working capital
• For other business & agriculture customers, ATB will work with customers on a one-on-one basis and further solutions are being considered at this time.

Additional Support for Credit Union Members

• Credit union members will have access to a variety of programs and solutions designed to ease difficulties with loan payments and short-term cash flow
• Contact your credit union to work out a plan for your personal situation

Additional Resources

Alberta Tax Relief Updates

• Altus Group is monitoring Alberta tax relief programs, including municipal property taxes, and posts information on their website as it is released.

Shaw Free Wi-Fi for All & Free Channels for Shaw Customers

• Shaw has opened up Shaw Go WiFi, Canada’s largest WiFi network, to everyone — whether or not they are a Shaw customer. They also have no data caps on their internet plans
• All Shaw Cable and Shaw Direct customers have been given access to a number of channels for free during this period
• If you are having concerns about paying your monthly Shaw internet bill because of the COVID-19 situation, Shaw will work with you to find a flexible payment arrangement

Ecolab Relief Measures

• Ecolab has announced two relief measures to assist hotels:
  • Rental Equipment: For all hotels with Ecolab rental equipment (dishmachines, glasswashers, boosters, water softeners), Ecolab is waiving all rental fees for a period of 90 days.
  • Pool & Spa Program: All hotels utilizing Ecolab pool & spa services have had monthly billing suspended as of April 1st until such a time that pools are allowed to reopen. Upon reopening, billing will resume with an additional one month billing as a re-startup fee.
• Please ensure that any Ecolab invoices are up to date to prevent any complications in applying these relief measures.
• Questions? Please contact your Ecolab representative, or if you do not have a representative, contact Michael Van Dyke.

Hotel Association of Canada Resources

• Hotel Operating Procedures: Self-Isolation
• Temporary Guidelines for Modified Operations
• FAQ: Taking Care of Employees and Guests
• Guidance for Employers to Plan & Respond to Coronavirus
• Hoteliers Guide: Government of Canada Economic Relief Options

Additional Liquidity & Credit Resources

Resources for Canadian Businesses (Government of Canada)

Hospitality Financial Leadership- What to Do in a Financial Crisis (David Lund, The Hotel Financial Coach)

FAQs for Reporting Financial Metrics (Smith Travel Research, PDF download)

Property Closures

In the unfortunate event that you decide to close your property, the AHLA has prepared a Sample Property Closure Checklist (Word doc file download) to assist you.

Please contact Tracy Douglas-Blowers, Director of Membership & Industry Relations, at tdblowers@ahla.ca or 780.423.9227 if you have other questions or need additional support.